The Future Of Innovation - Three Significant Drivers

Mr Jeffrey Phillips

There are three significant drivers of the future of innovation: economic maturity, intellectual property and co-creation. From an economic point of view, innovation varies based on the economy. In developing countries, innovation provides new products and technologies to deliver basic necessities, or to improve the health and well-being of the population. In emerging economies (Brazil, Russia, India, China) innovation is about catching up to the efficiency, effectiveness, and creativity of the “developed” world. The BRIC countries are less interested in developing the mass market products and services and want to move into research and design and create new, high value products and services. In the leading economies, the future of innovation is creating new intellectual property and new products and services as the traditional manufacturing-based economy shrinks.

Over history, economies develop through a number of phases: agricultural, manufacturing and services. The innovation economy is the next phase in this evolutionary growth process. Underdeveloped and emerging economies seek to skip phases in the maturity curve using innovation as a method to move directly to the creation of intellectual content. Which countries can create the environment for innovators to succeed?

From a corporate perspective, the future of innovation is about demanding more from the workforce. Traditionally, innovation has been driven from the top down. Increasingly, firms are recognizing the need to capitalize on the creative insights of every employee and the larger partner network. Employees are evaluated and compensated on their intellectual capital output, rather than their labour hours. The need for increased innovation will mean that firms will place a higher emphasis on innovation at all levels of the organization, seeking the best ideas from any origin. This will also disrupt traditional corporate cultures where “time served” is more important than great ideas. As ideas, insights and the ability to identify emerging opportunities continue to grow in importance, traditional corporate culture will be dramatically changed. Firms that recognize the change and adapt their compensation and recognition systems will succeed.

The future of innovation is also driven by customer demand and co-creation. P&G has embraced open innovation and certainly many firms will follow. In fact, one can anticipate the time when individuals and small firms create innovative new products and services and larger firms such as P&G become the marketing and distribution mechanism for these new innovations. As the barriers to mass production and distribution fall, many more innovations can reach the market, since the market is no longer defined by physical shelf space, but online “shelf” space as well. As the focus on co-creation gives way to individual innovation and publication (a la YouTube), many more individuals become innovators and rely on existing networks or channels to distribute their disruptive or incremental products and services.

These three trends are entwined, as innovators can generate intellectual property and co-create new products and services in virtually any geography. In truth, innovation will drive dramatic changes to corporate structures and even governments, rather than the reverse.

Article © 2009 Mr Jeffrey Phillips. All rights reserved.

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Mr Jeffrey Phillips

Mr Jeffrey Phillips

affiliation:   Ovoinnovation

position:  VP Marketing, senior consultant

country:  United States

area of interest:  Idea Management, Innovation processes

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